Social Welfare reform and a single welfare payment for all people of working age must address poverty traps, access to supports and services and the availability of jobs

The Minister for Social Protection, Joan Burton, has signalled the most radical change in the social welfare system for decades. She proposes to replace seven of the most important payments with a single payment rate and common conditions for eligibility. This process has already begun with the changes to eligibility for the One Parent Family Payment and payments for those on Community Employment schemes. The Department has also signalled that detailed proposals will be put to the Troika in March.

EAPN Ireland supports the general principle of a single payment on condition that the correct services and supports are put in place. Equally, we are not opposed to activation measures if these supports and services are in place and if appropriate work is available. However, as the Department itself has acknowledged, to make such changes in current conditions risk pushing some of the most vulnerable people in the country further into poverty and creating even greater poverty traps preventing people taking up work.

Background to these proposals

In November 2010 the Department of Social Protection published a Report on the desirability and feasibility of introducing a single social assistance payment for people of working age The overall proposal is that everyone age 18-64 years on this social welfare payment would be directed to the support or services they need in order to return to work or other education or training opportunities. The report proposes that all payments be aligned to the Jobseekers Allowance payment and apply to all new applicants for social welfare supports whether they be a person with a disability, a lone parent, qualify for farm assist, etc. The report proposes that carers not be included in the single payment but recently there are suggestions that they will be excluded.

The 2010 report clearly states that the changes should only be brought in if they reduce poverty and social exclusion for people and make work pay. It also recognises that the development of supports and services is necessary to this. It outlines clearly the major loss of income for most groups provided separately under the current system.

Since the report was published there have been consultations with different organisations including those representing people affected by the changes. It is clear from these consultations that while no organisation is opposed to the introduction of a single working age payment there are major concerns particularly in relation to the capacity of the state to provide the necessary supports and services and in relation to the current lack of jobs and opportunities for people to take up.

Therefore, organisations, including EAPN Ireland, have asked that no changes are made that would reduce the current level of current income supports until such a time that the services and supports outlined in detail in the report are put in place.

The Europe 2020 working group of EAPN Ireland (membership below) has made a submission to the Joint Oireachtas Committee. The submission makes it clear that we support the idea of a single social assistance payment for all people of working age, provided that the necessary services, supports and pathways to employment are put in place.

The Department’s 2010 report which laid the basis of the current proposals for a single payment acknowledges that, without policy changes in other areas, most people moved onto Jobseekers Allowance will suffer a loss of income. The Minister needs to spell out how these supports and services will be put in place before changing the payments or eligibility criteria.

We are concerned that changes have already been made in Budget 2012 and that an implementation plan will be presented to the Troika in early April without any clarity on how the concerns expressed in the Department’s own report and in consultations will be addressed.

The current system allows for appropriate policies to be developed over time to meet the needs of particular groups. It would be a negative step from a policy point of view if the appropriate responses to group needs are lost in the implementation of a new single payment based on a simple template of Jobseekers Allowance.

The services and supports in place to address the needs of those currently on the Live-Register are already under pressure and the National Employment and Entitlement Service which is being established will also not have the resources to address this. Adding even greater numbers to this system, including people facing a complex range of barriers, will only overburden an already struggling system, which is in the process of reform.

It is clear from our members’ experience and from studies that the vast majority of those who would be impacted on by the introduction of a single payment want to work but are prevented from doing so due to the barriers outlined in the Department’s report.

We are concerned that if the reforms are not correctly implemented they will increase the negative attitude towards groups such as lone-parents and people with disabilities who are often attacked, despite the evidence, as being unwilling to work.

There are currently very limited jobs available. The reforms to the welfare system must therefore go hand in hand with a strategy to create decent jobs.

Poverty Traps

It is vital that any changes to the system remove, and do not deepen, poverty traps.

We have a number of very specific issues and concerns.

The Department of Social Protection’s 2010 report clearly acknowledges the loss of income for different groups if the single payment is introduced without other changes. The current differential supports were put in place precisely to cover costs of services and supports such as childcare. The loss of income under the proposed changes would in particular apply to carers, to those in Community Employment and those going to work who qualify for income disregards. If the services and supports are not provided it will result in poverty traps for these families forcing them to meet these costs from more limited resources or to leave or not to take up a job or a place on a Community Employment Scheme.

Income disregards play an essential role in addressing the cost of services related to going to work for those receiving these payments. This includes the cost of childcare and afterschool care for lone parents and the costs incurred by having a disability such as transport. As highlighted above, the loss of income disregards will immediately impact on the capacity of people to be able to take up employment. In this situation the changes might appear at first hand to be a saving for the Department but the actual impact would be to act as a barrier to people moving off social welfare supports and is therefore an actual increase in costs to the state.

While a reform of the means testing system for secondary benefits would be welcome, the introduction of a single payment based on Jobseekers Allowance would result in the loss of secondary payments for people under some of the existing payments. This would include the Household Benefit Package and free travel for people on Disability Allowance, Carer’s Allowance and the Blind Pension. The loss of these supports would be detrimental for the people affected in light of the extra costs of disability.

The role of Family Income Supplement (FIS) needs to be explored as it could help to overcome some of our concerns. However, member organisations are aware of major waiting times to get this payment so if it does become part of the single working age payment support system, it will need to be easier to access.

With the exception of those undertaking caring responsibilities, the majority of those on social welfare payments want to work. They would welcome a system of accessible services which addresses their needs and supports them to access a decent job, so allowing them and their families a decent income. The implementation of a single working age payment in a considered way, with all the elements being developed together, allied with a job creation strategy, has the potential to make a key contribution to this. However, in the current climate, with cuts to essential services and little if any work opportunities, now is not the time. Cutting social welfare supports and imposing even greater conditions on people to engage with the system when there are so few opportunities will only have negative consequences for people and undermine the Department’s own goal of ensuring that all people of working age have sufficient income and opportunity to participate as fully as possible in economic and social life.

The Government must re-engage in real consultation and not continue to press forward with changes at a time when such changes will only result in greater poverty for the groups involved making it even more difficult for them to take up work and training opportunities.

Membership of the EAPN Ireland Europe 2020 Working Group includes Age Action Ireland, Congress Centres Network, Disability Federation of Ireland, Dublin Employment Pact, EAPN Ireland, Irish National Organisation of the Unemployed, Irish Traveller Movement, Migrant Rights Centre Ireland, National Adult Literacy Agency, National Youth Council of Ireland, National Women’s Council of Ireland, One Family, OPEN and SIPTU.

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